Climate Establishment Warns Cuts Could Spell Disaster for British Economy

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The Department of Energy and Climate Change (DECC) could be facing a 90 per cent cut in staff over the next few years, an environmental think tank has warned.

The prediction has prompted politicians and academics to issue dire forecasts for Britain’s economic future, but right-wing campaigners have asked: why not scrap DECC altogether?

For its latest report the environmental think tank Green Alliance, which the Guardian describes as “politically neutral”, has calculated how much money DECC will have to spend after George Osborne’s austerity drive, once ring fenced spending has been taken into account. The answer it came up with is that, by 2018/19, DECC could have just £40 million for “resource spending”, compared to a current budget of £402 million in 2014/15. They conclude that 90 percent of staff will have to be shed.

The ring fences include those surrounding the budgets for the health, education and overseas aid departments, which drives the average cut of 3.3 percent up to 11.6 percent for non-ring fenced departments over the next five years. Further ring fences pop up within the departments internal spending, as nuclear clean-up costs, and liabilities over old coal must be accounted for, while the paper assumes that capital spending on new projects won’t be touched.

Matthew Spencer, Green Alliance’s director said: “If you end up with a dumbed-down department you get a bad deal for consumers and citizens.”

But Ed Davey, the former Liberal Democrat Energy Minister during the coalition government, who lost his seat at the last election, has issued a much stronger warning. He has predicted: “The main effect of slashing the headcount at DECC will be cutting economic growth and undermining private sector investment,” adding: “It is Osbornomics at its worst.”

Other members of the climate establishment have followed suit: eight academics, including Prof Paul Ekins Professor of Resources and Environmental Policy University College London, and Dr Robert Gross, director of the Centre for Energy Policy and Technology at Imperial College have written to Oliver Letwin, a minister at the Cabinet Office to “express [their] concern that the next round of Whitehall budget reductions could inadvertently undermine the government’s ability to complete its important energy market reforms and deliver climate policy.”

They go on to warn: “Costs to consumers from energy policy are likely to be higher, and energy supply less secure, if government does not protect its in-house expertise to negotiate contracts with the energy industry, to complete energy market reform, and to develop new energy saving programmes for the most vulnerable customers.” They offer no evidence for this claim; the letter has been published on Green Alliance’s own website.

But the right-wing campaign group the TaxPayers’ Alliance (TPA) has offered an alternate solution to DECC’s impending staffing crisis: they suggest that the department be scrapped and its responsibilities handed over to another government department, saving £billions each year.

They have called on the Chancellor George Osborne to ensure that next week’s Budget is “a radical one”, and have called on him to keep his promise to eliminate the budget deficit by 2018. TPA spokesman Andy Sylvester said: “With Britain still running a £75 billion deficit this year and adding to a £1.5 trillion credit card bill, it is crucial he [Osborne] enacts significant spending reductions early on in this Parliament.

“Rather than give in to misguided calls to ease up on spending restraint, he must use this budget to go further and faster on deficit reduction without hitting families via increased cost of living taxes.”

Sylvester suggested that one of the tools available to achieve the target is through “radical reform of Whitehall, including the scrapping of the Business and Energy Departments, resulting in savings of more than £5 billion by the end of the Parliament.”

Jonathan Isaby, chief executive of the TaxPayers’ Alliance, added: “It’s time for an end to the gimmicks and the tinkering. The Chancellor has been given a mandate to eliminate the deficit, and he must crack on with it – that means radical changes to Whitehall, welfare reform, and driving down on public sector inefficiency.”

A DECC spokesman said: “DECC budget will be set out by the Chancellor and any estimates before that are pure speculation.”

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